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Migrant workers duped by middlemen : Lanka losing Rs. 40 b of expat earnings per year

by Ravi Ladduwahetty

Sri Lanka is losing over Rs. 40 billion annually from its expatriate earnings which are funnelled to Swiss bank accounts of unscrupulous middlemen.

The middlemen promise to deliver the remittances from the Middle East, Singapore, Korea and Italy to the workers' families but the funds are instead diverted to the foreign bank accounts.

Prime Minister Ranil Wickremesinghe, at last week's Cabinet meeting, has appointed a three member sub committee comprising Labour and Employment Minister Mahinda Samarasinghe, Foreign Minister Tyronne Fernando and Finance Minister K.N. Choksy to probe the scam and submit a report on the matter.

Minister Mahinda Samarasinghe told the Daily News yesterday that Sri Lanka's projected incomes from nearly one million migrant workers for last year was US$ 1.5 billion ( around Rs 150 billion) while only US$ US$ 1.1 billion (Rs. 110 billion) has actually been remitted. The remaining US$ 40 billion has been laundered by these middlemen.

Explaining this scam, the Minister said:" There is a well-organised network of middlemen who operate in the form of a mafia. They go to these expatriate workers and promise them to deliver the money to the doorsteps of their families. These middlemen thrive on the ignorance of these expatriates, who get duped.

The main marketing strategy of these racketeers is that they could hand deliver these earnings. But what is provided to the families is substantially less than what they actually earn and remit."

Minister Samarasinghe said the only way to combat this menace was to establish money exchange bureaus in those countries with branch networks in Sri Lanka and to educate these expatriates so that they will not be duped hereafter. " That is the only way that we can bust this racket."

The Minister has appointed two firms of Chartered Accountants- KPMG Ford Rhodes Thornton & Co and Ernst and Young to probe this scam.

A team from the audit firms will visit these countries and provide the Government with the Terms of Reference (TOR) to commence this probe.

Chairman of the Sri Lanka Foreign Employment Bureau (SLFBE) Susantha Fernando said setting up money exchanges will enable Sri Lanka to get the full remittances, which will increase the collection to US$ 1.3 billion ( Rs. 130 billion) this year and the total earnings to US$ 1.7 billion ( US$ 170 billion).

The expatriates will be guided on opening Non Resident Foreign Currency (NRFC) bank accounts and they will be able to take dollar loans from their earnings, Mr. Fernando said.

The total estimated expatriates in these countries are: Middle East- 800,000 (of which 300,000 are in Saudi Arabia), Singapore-20,000, Italy- 35,000 and Korea - 12,000.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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